EMAs open up vital projects

Australia has been a long-term importer of foreign labour, as indeed have been many other countries.
Photo: Rob Homer

by
John Burgess | Julia Connell

The publicity over the first enterprise migration agreement (EMA) is hardly surprising. It involves foreign workers. It is linked to a wealthy mining magnate.

It comes at a time when manufacturing establishments are closing their doors. It also raises questions about the distribution of the benefits of the mining boom.

This episode forces us to examine four issues: why does Australia need EMAs such as the Roy Hill agreement? Do EMAs expose a deeper problem with the labour market and the economy? Is the problem the terms of the EMA or its employment of foreign workers? Is there anything positive that can be learned from this episode?

EMAs were a by-product of the National Resources Sector Employment Taskforce. This committee included business and union representation.

The rationale for the EMA is to facilitate the development of large resource projects of at least $2 billion and with a peak employment of 15,000 workers.

Such projects are significant since they involve resource processing, not just extraction and shipment for offshore processing.

The initial construction phase will be followed by the subsequent processing of resources stage. This represents a big move forward for Australian mineral projects, which tend to be about shifting resources for processing elsewhere.

The faster the construction phase can be completed the faster the longer-term processing jobs can begin. In this context, EMA arrangements make sense if they are targeted, monitored and facilitate the subsequent generation of value-adding processes and jobs.

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Australia has been a long-term importer of foreign labour. Immigration is the norm and poaching labour from overseas has been a traditional means of meeting labour shortages. The Roy Hill agreement has resulted in claims that foreigners are taking the jobs of locals. After all, the unemployment rate is around 5 per cent and the underemployment rate is another 5 per cent.

However, the problem is that they either do not possess the skills or the experience (such as unemployed youth); they do not want full-time work (the underemployed); they do not have the required occupational and skill sets; or they are not attracted by the challenges and lifestyle issues associated with employment in remote sites.

If the supply of skilled construction workers were available in Australia, a vast array of employment agencies would be knocking on the doors of the large mining companies offering to meet their labour needs.

The problem is about matching labour supply with labour demand, and making employment in remote regions sufficiently attractive to lure labour from eastern cities.

Throughout the region and the world, short-term construction jobs are largely taken by foreign labour, often under conditions of exploitation and minimal rights.

Australia does have a relatively strong economy. It does have skill shortages across the professions and the trades. Resort to special immigration programs (such as 457 visas) for meeting these needs is not new. The innovative aspect of the EMA is that it is a collective agreement between the federal government and the resource company for large-scale employment of migrant labour with conditions attached.

With overall immigration of around 200,000 a year, the EMA represents a very small component of the total immigration program and of the skilled immigration program.

The terms of the EMA are linked to meeting minimum national and international labour standards; hence there is no undermining of wages, conditions or rights. Also, the EMA contains clauses that guarantee training expenditure and contributions to a training fund.

There is a requirement for companies to address skills development. The Roy Hill agreement also included labour market programs for indigenous Australians. In terms of positive developments, EMAs do represent a shift towards downstream processing and job generation in the resource sector with short-term recourse to immigrant labour in the initial and important construction phase.

The details of the first EMA are not that of wage cutting, exploitation and the removal of employment rights, rather there are conditions that target additional training and skill development, and the employment and training of indigenous Australians.

The issues of a skills shortage and accessing labour in remote resource regions remain, as does the problem of labour matching. The EMA represents a mix of short-term expediency tempered with some long-term strategic labour development.